The optimal design of credit contracts and bankruptcy procedures is an important policy question both in developed market economies and in countries with emerging markets. In this paper I deal with several theoretical considerations related to these important policy problems. My main concern is...

This paper analyses problems within the asymmetric information models (principal agent models) where we replace standard assumption of maximisation of expected income by maximisation of probability of economic survival. This paper concentrates on two basic models- adverse selection model and...

This paper shows results of comparison of the original theoretical conception of modeling human decisions under risk with two well known models. In the paper the demand function for insurance is constructed for the model of maximization of the probability of agent’s (economical) survival. This...

This paper provides a critical survey of some recent developments in the principal-agent approach to the relationship between lenders and borrowers. The costly state verification model of optimal debt contract is introduced and new results with respect to optimality of standard debt contracts in...